NEW YORK - Neuberger & Berman Management Inc. has suffered unusually high turnover in its fixed-income unit.
At least 13 professionals have left since 1994, culminating in the departure in August of Theresa A. Havell, the firm's fixed-income chief and one of the founders of the $11 billion fixed-income business unit.
Some former employees at Neuberger, who spoke on the condition of anonymity, said it was Ms. Havell's management style that led to the unusual turnover and her eventual departure. Two others, though, resigned after she left the firm.
And some of Neuberger & Berman's pension fund clients are watching the firm more closely because of the personnel changes, although none of the clients contacted has terminated the firm.
Ms. Havell said she left under "mutual agreement." She said she disagreed as to what the appropriate marketing strategy was for the fixed-income area.
Richard Cantor, executive partner with Neuberger & Berman, declined to comment on why Ms. Havell left.
He acknowledged the firm's turnover in fixed-income personnel has been high.
He said the loss of partners is very infrequent, but "always painful."
"I can't remember the last time a partner left Neuberger & Berman. I don't want to be here the next time," he said.
Nevertheless, he said: "I think we came out stronger than we were."
The two other builders of the fixed-income group, Theodore Giuliano, who co-founded the group in 1984, and Martin McKerrow, who joined it six months later, are taking Ms. Havell's place.
Mr. Giuliano will be chief investment officer of the unit, and Mr. McKerrow will be chief operating officer, taking on some outside client servicing and marketing duties, Mr. Cantor said. Previously, Ms. Havell held both roles, he said.
A few former employees said Neuberger's highly autonomous partnership structure allowed Ms. Havell too much latitude in managing personnel.
She also raised a lot of money: Under Ms. Havell, the fixed-income department grew to $11 billion in management from essentially nothing in 12 years.
Some former employees said Ms. Havell could sometimes become very enthusiastic about introducing an investment offering, sometimes in response to a press report on a big search for money managers.
"We've got to get this piece of business," was the attitude Ms. Havell might take, if there was word of a search under way, even if Neuberger didn't have particular expertise in that area, an ex-employee said.
Likewise, if the new product didn't catch on, it could lose financial support quickly, leaving employees brought in to work on the product with no resources to build the business, the sources said.
Ms. Havell denies both of those statements.
"This sounds not logical. Our investment style was among the most clearly delineated in the country," she said.
Ms. Havell said under her direction, Neuberger & Berman was a leader in moving into new fixed-income areas, such as mortgage-backed securities, asset-backed securities and global fixed income.
But the approach was diversified, she said, investing in fixed-income securities that most benefited the clients, remaining consistent with the firm's approach.
Regarding the view by some ex-employees that Ms. Havell was given too much latitude in making personnel decisions, Mr. Cantor said: "I don't know that I would agree with that." Ms. Havell reported to Mr. Cantor.
Mr. Cantor declined to respond to specific criticisms.
When Ms. Havell left, she took Hemont Baijal, senior portfolio manager, and Julia Wyatt, a senior marketer, with her, Ms. Havell said.
Mr. Baijal said his experience working with Ms. Havell was very positive. He said he looks forward to the possibility of working with Ms. Havell in the future.
As this story went to press, the three were contemplating their future, possibly forming their own firm. Ms. Havell declined to elaborate.
Among the others who have left:
Joseph Barcic, director of client services, left two years ago for a position as a senior vice president in the Morristown, N.J., office of Callan Associates Inc.;
John Flahive, a former vice president and portfolio manager, who left Neuberger in 1994. He is vice president in portfolio management for Mellon Trust's high net worth division in Boston;
Joseph F. Gieger, who was director of marketing, North Central region, left in 1995 to join UBS Asset Management (New York) as vice president of marketing and client service;
Brian Hamel, an institutional marketer, returned to his marketing position at Met Life in Atlanta;
Steven Johnson, formerly a director of marketing and client service, joined Martin Currie last year as a vice president to head up its U.S. marketing office (his replacement was Mr. Gieger);
Carolyn P. Taylor, managing director of the company's wrap fee group under Ms. Havell, now runs her own investment firm, Weatherly Asset Management;
Sal Tornello, who ran the fixed-income trading desk, left about two years ago, Mr. Cantor said. His current employer is not known;
Didi Weinblatt, portfolio manager, left in late 1995, and recently formed her own firm, Copernicus Asset Management, New York, with another former Neuberger employee, Bozena Trydos, a portfolio manager who left Neuberger in 1994; and
Steve White, a senior portfolio manager in mortgage-backed securities, left in late 1995 to join Morgan Stanley's London office.
As expected, the departures of Ms. Havell, Mr. Baijal and Ms. Wyatt led to increased scrutiny from pension clients. But none of the clients contacted showed any interest in making a change.
"We always do a review when a manager has a (personnel) change that affects our portfolio," said Jo Witt, secretary-treasurer for the $3.6 billion Oklahoma Teachers' Retirement System, Oklahoma City. Neuberger manages $250 million in fixed income for Oklahoma Teachers, she said.
Andrew Bednarz, manager-benefit plan investments for Occidental Petroleum Corp., Los Angeles, views the situation as a positive because of the promotion of Mr. Giuliano, who was in charge of Occidental's portfolio, he said.
Thomas O'Connor, treasury director for Aerospace Corp., El Segundo, Calif., said his fund's relationship with Neuberger & Berman has not been affected by personnel changes there. He declined to provide further information.
In a separate matter, Richard R. Schmaltz, director of the firm's equity research, recently joined J & W Seligman & Co. Inc., New York, as managing director and director of investment.